berni madoff

[kitsch]

http://en.wikipedia.org/wiki/Ponzi_scheme
http://en.wikipedia.org/wiki/Bernard_Madoff

srsly, who would trust a guy with a name like madoff?

[wartomods]

all world


pyramid schemes are cyclical

[DBoons Ghost]

He was once the most trusted man on the Street.

It's too bad he caught the greed bug. I am reserving any comment on him until the story is known. Seriously he was a man of integrity at one time and something on the scope of what he did doesn't just happen.

[spitfirejunky]

Early indications that Madoff may have been in trouble emerged in 2007. The Madoff Family Foundation donated only $95,000 to charitable groups. This was a major drop from previous years. In 2006, the foundation had donated $1,277,600.

The scheme began to unravel when, in 2008, the general market downturn motivated a larger than usual number of investors to cash out their positions. They attempted to withdraw $7 billion from the firm, but Madoff struggled to raise this sum. On December 10, 2008, he suggested to his sons, Mark and Andrew, that the firm pay out several million dollars in bonuses two months ahead of schedule, from $200 million in assets that the firm still had. According to the complaint, Mark and Andrew, reportedly unaware of the firm's pending insolvency, the sons confronted their father, asking him how the firm could pay bonuses if it could not pay investors. Madoff then admitted that he was "finished" and that the asset management arm of the firm was in fact a Ponzi scheme. Mark and Andrew then reported him to the authorities.

The FBI investigation shows no signs of implicating family members of fraud, with federal authorities saying his wife Ruth is not accused of wrongdoing.

This is how the cookie crumbles and we all suffer.

[DBoons Ghost]

This is how the cookie crumbles and we all suffer.

Yeah that doesn't explain the need for the scheme. It doesn't explain how one of the most successful traders on Wall Street blew all that money when guys on the same scale managed to survive. It sucks he turned into a scumbag either way but I just want to know how. A lot of people admired this man. He made NASDAQ into a powerhouse when he ran it. It just doesn't make sense.

[PunkItUp]

he "made off" with BILLIONS lolol

[DBoons Ghost]

he "made off" with BILLIONS lolol

Thats actually clever.

[PunkItUp]

/copyrights pun :D

[spitfirejunky]

Yeah that doesn't explain the need for the scheme. It doesn't explain how one of the most successful traders on Wall Street blew all that money when guys on the same scale managed to survive. It sucks he turned into a scumbag either way but I just want to know how. A lot of people admired this man. He made NASDAQ into a powerhouse when he ran it. It just doesn't make sense.

You can get away with these kinds of schemes so long as (investor) confidence is preserved and you have at least some means of profit in the company. All this trust you talk about may have been built from the same relatively small-scale schemes we caught him for now.

I'm just guessing though. Any way you look at it, this economy is going nowhere without integrity.

[JohnXDoe]

this just makes no sense to me. i mean how much money can one person need? or have or use? i mean i understand if you make the money honestly. its YOUR money you earned it legally

but to swindle and cheat those who trust you...just to get piles of money you may never need or use? its senseless

i wonder if he blames the investors and thinks them all dumb?

reminds me of a story i saw recently about this french douche bag who called himself "Rockefeller" and swindled some well to do people out of millions. he was young, french accent, threw a lot of money around. he would charm people, offer them an "investment opportunity," and they would bite. he did his time in prison, returned to france (where he was born to a drunk dad and a prostitute mom years earlier) and now has become a bestselling author (documenting his exploits), tv host, and all around celebrity. he has even met with politicians and such

his explanation seems to be "stupid americans its their own damn fault i'm so good i fooled them." oh, and he's not a "con man" according to him. he is a "confidence man" and a skilled actor :rolleyes:

france would seem to agree as they love this poor french asshat who came to america and swindled our "corrupt" rich

i wonder of this is somewhat the attitude of Madoff, too. "hey they were dumb enough to trust me...."

if so thats just kinda sad

[Castillo]

Bernie Madoff is a strawberry c*nt.

[siva_chair]

Don't forget, Madoff's scheme is nothing compared to the Ponzi scheme the US government has been pulling for many many years: Social Security.

[Already_Taken]

true but nobody was told they were going to make a profit when they paid into SS.

[siva_chair]

So? It still operates exactly like a Ponzi scheme.

There is one major difference, though: No one was forced to pay into Madoff's Ponzi scheme if they did not want to. The same cannot be said for SS.

[Already_Taken]

lol you are so arrogant, i point out a pretty major difference (like it matters) and ur like NU UH, this is actually the only major difference. seriously dude i'd kick your *** irl and i bet nobody wuold help you

[siva_chair]

lol you are so arrogant, i point out a pretty major difference (like it matters) and ur like NU UH, this is actually the only major difference.

So stating facts is being arrogant? Hmm...

The "difference" you pointed out is completely immaterial.

seriously dude i'd kick your *** irl and i bet nobody wuold help you

Oh my I'm so scared.

[spitfirejunky]

So? It still operates exactly like a Ponzi scheme.

There is one major difference, though: No one was forced to pay into Madoff's Ponzi scheme if they did not want to. The same cannot be said for SS.

That's like saying X commit murder but no one got killed. There is no Ponzi scheme if there is no investment.

[Already_Taken]

So stating facts is being arrogant? Hmm...


you're arrogant because even though you're wrong, you still condescend everyone like you were right.

[siva_chair]

That's like saying X commit murder but no one got killed. There is no Ponzi scheme if there is no investment.

Except there is investment in Social Security, so it is exactly like a Ponzi scheme.

Workers are investing in their retirement benefit by making regular payments into a joint fund (which is paid out to current retirees). It is identical to a Ponzi scheme it both mechanics and it's unsustainability.

you're arrogant because even though you're wrong, you still condescend everyone like you were right.

Except I'm not wrong, and you have done nothing to substantiate your claim that I am.

[Already_Taken]

all im gonna do is point out how you say "workers are investing" when really they are saving, which was the exact idea of SS. nobody ever was supposed to make a profit.

[siva_chair]

all im gonna do is point out how you say "workers are investing" when really they are saving, which was the exact idea of SS. nobody ever was supposed to make a profit.

They aren't saving at all. Nothing is being saved. Do you not understand how SS works or something?

The are subsidizing current retirees with the promise of being subsidized by future workers.

[spitfirejunky]

Except there is investment in Social Security, so it is exactly like a Ponzi scheme.

Workers are investing in their retirement benefit by making regular payments into a joint fund (which is paid out to current retirees). It is identical to a Ponzi scheme it both mechanics and it's unsustainability.

Barring exceptional situations, there is always a payout so it's not an investment.

[siva_chair]

Barring exceptional situations, there is always a payout so it's not an investment.

Investment
n.
1. The act of investing.
2. An amount invested.
3. Property or another possession acquired for future financial return or benefit.
4. A commitment, as of time or support.
5. A military siege.

I'd say that SS qualifies.

There is always a payout so long as there are current investors contributing into the system. This is absolutely no different to a Ponzi scheme. In fact, it fits the definition to a T.

[Already_Taken]

you would say that it qualifies, but you are wrong. it isn't a scheme when you are told everything about how it works. shut up :rolleyes:

[siva_chair]

you would say that it qualifies, but you are wrong. it isn't a scheme when you are told everything about how it works. shut up :rolleyes:

Are you an idiot?

[spitfirejunky]

Investment
n.
1. The act of investing.
2. An amount invested.
3. Property or another possession acquired for future financial return or benefit.
4. A commitment, as of time or support.
5. A military siege.

I'd say that SS qualifies.

There is always a payout so long as there are current investors contributing into the system. This is absolutely no different to a Ponzi scheme. In fact, it fits the definition to a T.

http://en.wikipedia.org/wiki/Investment

There is no risk involved in SS, there is risk involved in contributions made within a Ponzi scheme. I can always expect to get a payout in SS but I cannot for an investment.

Even if you equivocate the term investment the difference remains with the expectation of getting a financial benefit.

[Already_Taken]

wow you got the last word good job, too bad it's a silly "ad hominem attack blah blah bhalhbalbhalba lahb la him full of **** ad hominem"

SS is a ponzi scheme, except nobody benefits, and we are told every detail of it. so it's not a scheme. you will do anything to shine a bad light on government. it's really just stupid.

im done.

[siva_chair]

http://en.wikipedia.org/wiki/Investment

There is no risk involved in SS, there is risk involved in contributions made within a Ponzi scheme. I can always expect to get a payout in SS but I cannot for an investment.

Even if you equivocate the term investment the difference remains with the expectation of getting a financial benefit.

Except there is a risk involved in SS. It's called the number of SS recipients outnumbering the SS contributers. There is absolutely no guarantee you will see an equal return on your contribution. In fact, it is probably unlikely that you will even come close.

And you do get a "financial benefit" if you become a SS recipient. You get a wage that is subsidized by the current workforce.

wow you got the last word good job, too bad it's a silly "ad hominem attack blah blah bhalhbalbhalba lahb la him full of **** ad hominem"

SS is a ponzi scheme, except nobody benefits, and we are told every detail of it. so it's not a scheme. you will do anything to shine a bad light on government. it's really just stupid.

im done.

Ok glad you agree.

And the fact that nobody benefits is really quite irrelevant to the point. A murder-suicide really doesn't really "benefit" either party involved, but that doesn't change the fact that a murder still took place.

And if nobody benefits (which someone actually does, believe it or not), why on earth would you want it?

[Ill Mitch]

Social Security is a Ponzi scheme, and if we try to fix it someone is going to get screwed no matter what. If we change it now, the people who have been paying into it their whole lives are going to get screwed because they wont receive anything, but if we fix it later the people paying into it now wont get anything in the future, so they will get screwed. It's one giant cluster**** of a problem.


There is something Gatsby-esque about the whole story. Madoff is a clear proxy for Meyer Wolfsheim, the vulpine, self-satisfied criminal seducer. And the affair has produced some of the violent tragedy that courses through the great American novel—an aristocratic French money manager who had entrusted $1.4 billion of funds belonging to him and his clients to Madoff committed suicide in his Manhattan office on Dec. 22. But the only act of vengeance taken locally against Madoff was a prank. The same night, thieves made off with a $10,000 copper sculpture—it depicted two lifeguards—from his home, only to drop it off near the Palm Beach Country Club. A note was attached: "Return stolen property to rightful owners."

http://www.newsweek.com/id/177708/output/print

Madoff can burn as far as I'm concerned.

[spitfirejunky]

Except there is a risk involved in SS. It's called the number of SS recipients outnumbering the SS contributers. There is absolutely no guarantee you will see an equal return on your contribution. In fact, it is probably unlikely that you will even come close.

You expect to see an equal return. An investment must be made with the expectation that you can lose the entire sum. This does not follow with SS.

And you do get a "financial benefit" if you become a SS recipient. You get a wage that is subsidized by the current workforce.

I'm not arguing this.

[siva_chair]

You expect to see an equal return. An investment must be made with the expectation that you can lose the entire sum. This does not follow with SS.

Except if the system collapses (as it inevitably does with any pyramid scheme) one does lose the entire sum, so it does follow.

[spitfirejunky]

Except if the system collapses (as it inevitably does with any pyramid scheme) one does lose the entire sum, so it does follow.

You're under the assumption that those engaging in SS are aware that they will not get a return. A properly functioning SS system will always reap you benefits just like any other insurance program.

I don't pay health insurance with the expectation that when I get into a near lethal accident I won't get treated.

[siva_chair]

You're under the assumption that those engaging in SS are aware that they will not get a return. A properly functioning SS system will always reap you benefits just like any other insurance program.

I don't pay health insurance with the expectation that when I get into a near lethal accident I won't get treated.

Whether those engaging in the system think they will get a return or not is irrelevant to the function and unsustainability of these pyramid schemes.

[spitfirejunky]

Whether those engaging in the system think they will get a return or not is irrelevant to the function and unsustainability of these pyramid schemes.

It's irrelevant to the unsustainability of the system, but very relevant to whether it's a Ponzi scheme or not. The idea of the Ponzi scheme is to give the illusion that the company is profitting, and since insurance programs aren't designed to make profit the same way other companies do, that it's a Ponzi scheme or not is moot.

[YouGottaBeCrazy]

srsly, who would trust a guy with a name like madoff?

that a jewish joke?

[siva_chair]

It's irrelevant to the unsustainability of the system, but very relevant to whether it's a Ponzi scheme or not. The idea of the Ponzi scheme is to give the illusion that the company is profitting, and since insurance programs aren't designed to make profit the same way other companies do, that it's a Ponzi scheme or not is moot.

Look, it operates exactly like a Ponzi scheme and is unsustainable like a Ponzi scheme, so for all intents and purposes it IS a Ponzi scheme. If something looks, acts, walks, and tastes like a chicken, it is a chicken, regardless of what other name you want to call it. Trying and obfuscate the issue by giving it another name and saying it is different doesn't do any good (unless of course your goal is in fact to fool people).

Also, don't forget that the Social Security did pay huge returns to its first investors. The first American to ever receive a check from Social Security retired exactly one day after the program went into effect. The five cents that was deducted from that person's check the only day they were a 'participant' yieled a sum payment of 17 cents. That was a 240% return, which annualizes out to around 87,600% (pretty damn good investment!). As time goes on, obviously the payouts get smaller and smaller (like in a Ponzi scheme) because of it's unsustainability (also like a Ponzi scheme).

[Already_Taken]

that's nice why are you talking about social security. we all know it's a stupid program.

you should look up what a "scheme" is. because the government isn't running one, loser

[Light Fantastic]

Scheme: an elaborate and systematic plan of action

well thats certainly strange, i did what you said and it contradicts you

[Already_Taken]

yeah whatever it has a negative connotation and you all just like to cry about the dam govt while typing your little hearts away about why it sucks so much.

[Light Fantastic]

so does that mean you admit social security is a scheme and you were wrong all along ok cool

[spitfirejunky]

Look, it operates exactly like a Ponzi scheme and is unsustainable like a Ponzi scheme, so for all intents and purposes it IS a Ponzi scheme.

I'll try this one more time then give up:

The idea of a Ponzi scheme is to entice investors looking for profit, while insurance programs aren't designed primarily to yield profit (for investors) but rather to mitigate damages, losses, etc. You can't conduct a Ponzi scheme in a system that yields benefits in very specific circumstances unless you intend on running a health insurance company that gives people spare hearts when they don't have heart disease or something ridiculous like that.

[siva_chair]

I'll try this one more time then give up:

The idea of a Ponzi scheme is to entice investors looking for profit, while insurance programs aren't designed primarily to yield profit (for investors) but rather to mitigate damages, losses, etc. You can't conduct a Ponzi scheme in a system that yields benefits in very specific circumstances unless you intend on running a health insurance company that gives people spare hearts when they don't have heart disease or something ridiculous like that.

Like I said, whether it promises to yield a profit to "investors" (which in the instance of SS, they are forced to invest) or not is immaterial to the fact that it operates exactly as a Ponzi scheme. It also is immaterial to the fact that it is unsustainable for the exact same reasons a Ponzi scheme is. You are still trying to obfuscate the issue.

[spitfirejunky]

Like I said, whether it promises to yield a profit to "investors" (which in the instance of SS, they are forced to invest) or not is immaterial to the fact that it operates exactly as a Ponzi scheme. It also is immaterial to the fact that it is unsustainable for the exact same reasons a Ponzi scheme is. You are still trying to obfuscate the issue.

I'm using your equivocation of investor. And you've shifted your argument from it is a Ponzi scheme to it operates exactly like one. I'm not denying the fact that there are glaring similarities between the two, but just because an orange grows like an apple it doesn't mean an orange is an apple.

[siva_chair]

I'm using your equivocation of investor. And you've shifted your argument from it is a Ponzi scheme to it operates exactly like one. I'm not denying the fact that there are glaring similarities between the two, but just because an orange grows like an apple it doesn't mean an orange is an apple.

Except if an orange grows like and apple, tastes like and apple, and looks like an apple....

Just because the government calls it something other than a Ponzi scheme, doesn't mean it isn't, in fact, a Ponzi scheme. The same thing holds if I put a sticker on an apple that says it's an orange. It doesn't make it an orange.

[spitfirejunky]

Except if an orange grows like and apple, tastes like and apple, and looks like an apple....

Just because the government calls it something other than a Ponzi scheme, doesn't mean it isn't, in fact, a Ponzi scheme. The same thing holds if I put a sticker on an apple that says it's an orange. It doesn't make it an orange.

I don't need to point out the difference again. There's no hope here.

[siva_chair]

I don't need to point out the difference again. There's no hope here.

That's because the difference you pointed out is immaterial, all things considered.

[Already_Taken]

the fact that investors in SS are told the truth and the investors in madoff were not is immaterial, that doesn't mean it's insignificant.

you are a fukin loony man, you only have 1 frame of mind and i'm positive you could never admit you are wrong.

[DBoons Ghost]

Dude give it up. SS is not now nor will it ever resemble a Ponzi sceme.

I can go online right now and check how much of my money is in SS. At some point if all goes well, I will be able to invest it just like I would any other 401k.

I dunno what level of stupidity insists people compare SS to a Ponzi scheme, since it's nothing new, but so be it. Most pyramid schemes are based on the same concept. That's a far assessment. However, a "scheme" would indicate otherwise, and SS is not by any stretch of the imagination, a scheme.

[Light Fantastic]

you guys are ****ing retarded

social security is a scheme we have been over this

[DBoons Ghost]

you guys are ****ing retarded

social security is a scheme we have been over this

By definition if you really stretch it I suppose the word scheme would apply since it is systematic.

Just not a Ponzi scheme, which would denote some kind of thievery.

[spitfirejunky]

That's because the difference you pointed out is immaterial, all things considered.

Speaking of which, nowhere in my argument did I even mention government. Your argument can be used to show that all private insurance companies are Ponzi schemes.

I know for a fact you're an intelligent guy but sometimes your positions really boggle me.

[Already_Taken]

By definition if you really stretch it I suppose the word scheme would apply since it is systematic.

Just not a Ponzi scheme, which would denote some kind of thievery.

NONONO u silly since the government runs it it is thievery!!

:rolleyes:

[Light Fantastic]

well technically it is stealing when its without consent maybe you should stop posting sarcastically like that it just makes you look retarded

[Already_Taken]

when something steals something from you, you get nothing in return; after all it is STOLEN. you should stop posting what you actually think it just makes you look retarded.

[Light Fantastic]

oh yeah i guess if i stole your car and gave you a moped in return that means i never stole your car in the first place!

**** i love this logic now i can finally get everything i've ever wanted in exchange for some paperclips

[Already_Taken]

if that makes you feel better, however cars and mopeds are different from one another while money and... money are not.

[Light Fantastic]

yeah thats right i forgot the government randomly gives me money in exchange for paying my taxes

what


stealing has nothing to do with getting anything back, its taking without consent, stop trying to avoid the point

[Already_Taken]

they give you the money you paid into social security back, exactly. stop trying to avoid the point.

[Light Fantastic]

they give you the money you paid into social security backumm

first of all, the funds of people who dont use social are taken to support it

second, even if we agreed that one was given their money back, taking without consent in the first place is still stealing retard gj

[siva_chair]

Speaking of which, nowhere in my argument did I even mention government. Your argument can be used to show that all private insurance companies are Ponzi schemes.

I know for a fact you're an intelligent guy but sometimes your positions really boggle me.

Except private insurance works differently because it is a conditional contract based agreement, whereas SS is not. Neither is a Ponzi scheme.

they give you the money you paid into social security back, exactly. stop trying to avoid the point.

Bank robbers don't steal, they just haven't paid the money back yet.

[Already_Taken]

except they aren't going to pay it back, because they're fukin robbers.

good try i think the point is there im done

[siva_chair]

If the point was that you are ****ing retarded, then it was made quite well.

[spitfirejunky]

Except private insurance works differently because it is a conditional contract based agreement, whereas SS is not. Neither is a Ponzi scheme.

The nature of the investment is immaterial remember?

[siva_chair]

The nature of the investment is immaterial remember?

No, the thing that makes private insurance different is that it isn't unsustainable like SS and Ponzi schemes are. A key aspect that makes SS a Ponzi scheme is that its methods for attaining funds are, in the long-run, bound to not work due to changing population demographics.

[spitfirejunky]

No, the thing that makes private insurance different is that it isn't unsustainable like SS and Ponzi schemes are. A key aspect that makes SS a Ponzi scheme is that its methods for attaining funds are, in the long-run, bound to not work due to changing population demographics.

Which by definition doesn't make SS a Ponzi scheme because its unsustainability has nothing to do with investment schemes which brings me back to square one.

[siva_chair]

Which by definition doesn't make SS a Ponzi scheme because its unsustainability has nothing to do with investment schemes which brings me back to square one.

It has everything to do with how SS is a Ponzi scheme. The mechanics of SS are exactly the same as a Ponzi scheme.

Private insurance on the otherhand, is not, as it is based on risk and payouts are not based on who joins first and who joins last.

[spitfirejunky]

It has everything to do with how SS is a Ponzi scheme. The mechanics of SS are exactly the same as a Ponzi scheme.

You stipulated that SS is unsustainable because of population demographics, not investment fraud. That's one big mechanical difference.

[siva_chair]

You stipulated that SS is unsustainable because of population demographics, not investment fraud. That's one big mechanical difference.

Well it suffers from that too.

If there is revenue left over after SS taxes, it doesn't save it, it goes to Congress and they spend it elsewhere.

And the unsustainability due to population demographics has every bit to do with the investment fraud as they are linked. A Ponzi scheme is also unsustainable due to population demographics (i.e. the longer the timeline, the number of initial investors will drop and the more recipients recieving returns there will be). There is no mechanical difference between the two.

[DBoons Ghost]

Siva you realize people are currently getting their SS checks with no complaint?

My folks get their checks every 2 weeks or so. I can log into SS's website and check on my money all the same.

I don't understand why you're being so stubborn about this. By your definition, every pension fund is also a Ponzi scheme.

[siva_chair]

Siva you realize people are currently getting their SS checks with no complaint?

My folks get their checks every 2 weeks or so. I can log into SS's website and check on my money all the same.

I don't understand why you're being so stubborn about this. By your definition, every pension fund is also a Ponzi scheme.

Yeah lots of people have been ripped off without realizing it.

And no, not every pension plan is a Ponzi scheme. I don't think you are understanding how they function.

[DBoons Ghost]

Of course I understand how they function.

And you cannot say "yeah lots of people have been ripped off without realizing it." without actually proving it.

I mean, truly if you're gonna be an arrogant douche about it, which is your right to do, I won't bother going back and forth post for post but honestly I think your contempt for your government presents some bias here. That's fine as well. I respect your opinion, but your opinion is not fact.

[siva_chair]

Of course I understand how they function.

And you cannot say "yeah lots of people have been ripped off without realizing it." without actually proving it.

You really need me to prove that the government is ripping people off via SS?

Where would you like me to start?

I mean, truly if you're gonna be an arrogant douche about it, which is your right to do, I won't bother going back and forth post for post but honestly I think your contempt for your government presents some bias here. That's fine as well. I respect your opinion, but your opinion is not fact.

I haven't said anything that isn't demonstrable fact, though. I suppose if pointing out the mechanics of a scheme makes one arrogant, I am guilty.

[DBoons Ghost]

You really need me to prove that the government is ripping people off via SS?

Where would you like me to start?

Am I supposed to answer you? Start with a case of someone not getting their SS because Senator Moron stole the money and is spending it on some island in the South Pacific,. Ripping people off to me would mean they take the SS money, spend it on luxurious vacations and when a citizen comes in need of their SS, they are told to **** off or strung along or any number of scenarios all resulting in them not getting their money.

Does the above in fact happen?

Prove the above and I will gladly bow out and agree with you.

[siva_chair]

Am I supposed to answer you? Start with a case of someone not getting their SS because Senator Moron stole the money and is spending it on some island in the South Pacific,. Ripping people off to me would mean they take the SS money, spend it on luxurious vacations and when a citizen comes in need of their SS, they are told to **** off or strung along or any number of scenarios all resulting in them not getting their money.

Does the above in fact happen?

Prove the above and I will gladly bow out and agree with you.

Well let's see the government continually debases and devalues the currency through inflation, which means that people who are receiving their SS are getting a devalued sum compared to what they put in. Sounds like a ripoff to me. If I gave a bank 3 pounds of gold to hold onto for 30 years and when I went back to claim it they gave me what amounted to half a pound of gold, I would feel pretty ripped off, wouldn't you?

Also, if the whole thing is unsustainable (and it clearly is) future beneficiaries will have paid in for most of their life and actually get nothing, so they definitely will be ripped off. The government doesn't take the excess SS revenue it gets (as it currently gets more incoming revenue than it needs to pay out, but this will soon change once the Baby Boomer retirement sets in full swing) and put it in any sort of savings or any sensible thing like that, it gives it to Congress and Congress spends it how it sees fit. It isn't paid out on interest accrued on a reserve fund as a private pension plan would do, instead benefits are paid out by current cash flow just like a Ponzi scheme.

[DBoons Ghost]

I've seen all those arguments and then some yet people still keep getting their checks.

SS is a disaster and a mess and some of what you say about it being unsustainable could be true, but that doesn't make it a Ponzi. Congress spends it how they see fit. You said this. If it were some kind of scam, Congress would be chillin in Barbados using SS money as opposed to using SS money to rebuild infrastructure and reinvest in this country we all claim to care so much about.

You make a lot of great points about how messed up the SS system is, and how shortsighted and ignorant the government is regarding how they control SS, but it still doesn't justify calling it a scam.

[spitfirejunky]

Well it suffers from that too.

If there is revenue left over after SS taxes, it doesn't save it, it goes to Congress and they spend it elsewhere.

And the unsustainability due to population demographics has every bit to do with the investment fraud as they are linked. A Ponzi scheme is also unsustainable due to population demographics (i.e. the longer the timeline, the number of initial investors will drop and the more recipients recieving returns there will be). There is no mechanical difference between the two.

I don't see the investment fraud part.

[siva_chair]

I've seen all those arguments and then some yet people still keep getting their checks.

SS is a disaster and a mess and some of what you say about it being unsustainable could be true, but that doesn't make it a Ponzi. Congress spends it how they see fit. You said this. If it were some kind of scam, Congress would be chillin in Barbados using SS money as opposed to using SS money to rebuild infrastructure and reinvest in this country we all claim to care so much about.

Oh so someone has to be chillin in Barbados for something to be a scam? Hmm....

You make a lot of great points about how messed up the SS system is, and how shortsighted and ignorant the government is regarding how they control SS, but it still doesn't justify calling it a scam.

Scam

n.
A fraudulent business scheme; a swindle.

I don't see the investment fraud part.

Well you should look to the part where they payouts are made to current beneficiaries from the present cash flow of current contributers and then keep the difference. This is what makes a Ponzi scheme investment fraud.

[DBoons Ghost]

Well, dude. If Uncle Sam is stealing the money what's he doing with it? If he's reinvesting it back into the system then maybe it's a case of "stealing from Peter to pay Paul" as that story goes. If the case was that Peter is us, and Paul is the jews, then I would say we be scammed. If not, then I dunno that I have any issues with it.

What does piss me off is that I won't get back nearly what I put in, unless I live to be 150.

[siva_chair]

Well, dude. If Uncle Sam is stealing the money what's he doing with it?

Typically wasting it, tbh.

If he's reinvesting it back into the system then maybe it's a case of "stealing from Peter to pay Paul" as that story goes. If the case was that Peter is us, and Paul is the jews, then I would say we be scammed. If not, then I dunno that I have any issues with it.

I don't know if it is "the Jews" if you will, but it really is a case of "stealing from Peter to pay Paul" and we are Peter. As to the identity of Paul, the government certainly is good at obfuscating his exact identity. :thumb:

What does piss me off is that I won't get back nearly what I put in, unless I live to be 150.

As you should be. That is one of the ways in which your are being scammed. Not only are you forced to give up this money (which really amounts to legalized theft and essentially enslavement to the state), you don't even get anywhere close to what you put into the system.

At least Madoff didn't force people through the threat of violence to participate in his scam...

[spitfirejunky]

Well you should look to the part where they payouts are made to current beneficiaries from the present cash flow of current contributers and then keep the difference. This is what makes a Ponzi scheme investment fraud.

Beneficiaries cannot benefit unconditionally so this moot. I cannot claim money without damages. This is the same with private insurance.

[siva_chair]

Beneficiaries cannot benefit unconditionally so this moot. I cannot claim money without damages.

Umm SS isn't based on risk and payouts are based on who joins first and who joins last.

This is the same with private insurance.

No it isn't. The two systems are functionally different from one another.

[spitfirejunky]

Umm SS isn't based on risk and payouts are based on who joins first and who joins last.

No it isn't. The two systems are functionally different from one another.

Pop quiz: when can you claim money from SS?

[Against Miik!]

when u old as ****

[siva_chair]

Pop quiz: when can you claim money from SS?

Currently, the age of 62.

This has jack **** to do with anything, though, but good try.

[spitfirejunky]

Currently, the age of 62.

This has jack **** to do with anything, though, but good try.

The cornerstone of a Ponzi scheme is being able to profit, not claim damages. Without profit there's no investment scheme.

[siva_chair]

The cornerstone of a Ponzi scheme is being able to profit, not claim damages. Without profit there's no investment scheme.

Really because Social Security even claims to be an investment.

[spitfirejunky]

Really because Social Security even claims to be an investment.

In an equivocal sense yeah.

[siva_chair]

No in an actual sense. Trust funds qualify as investments.

Also, SS even qualifies under your criteria of people being able to profit. The initial investors received pay-outs that were far larger than their contributions. As time goes on, this profit obviously diminishes, but the same holds true in a Ponzi scheme.

[spitfirejunky]

But I can't profit unconditionally.

[siva_chair]

But I can't profit unconditionally.

You can't profit unconditionally in any investment, silly. You can't even do that in a Ponzi scheme.

[spitfirejunky]

You can't profit unconditionally in any investment, silly. You can't even do that in a Ponzi scheme.

In insurance programs I can't claim money without having endured some agreed-upon circumstance. There is no profit to be sought, only those claims that I use to hedge old age, unemployment, etc.

Also, SS even qualifies under your criteria of people being able to profit. The initial investors received pay-outs that were far larger than their contributions. As time goes on, this profit obviously diminishes, but the same holds true in a Ponzi scheme.

That is an unfortunate consequence of SS and provides compelling similarities to a Ponzi scheme (I already conceded this) but you're still missing the fundamental difference.

A Ponzi scheme is conducted in a framework where profits are unconditional, i.e. if the company made a profit I have to announce these profits to investors and pay them accordingly. If I redistribute investments in a such a way as to give the illusion of profit, I'm running a Ponzi scheme.

In insurance programs like SS I cannot distribute cash on a whim. Someone had to have suffered a loss. This is what makes the cash flow in insurance programs much different from those in regular companies. I do not pay more than the amount of money agreed to cover certain losses and I cannot pay this money without knowing for certain that this loss was endured. So this "profit" you keep mentioning is actually a claim used to hedge a certain loss, in the case of SS that would be old age. There is transparency and no illusion of profit, so there is no Ponzi scheme.

If you're prepared to call SS a Ponzi scheme then you're also prepared to declare that that money distributed to those who have suffered legitimate losses is illegal and should be confiscated. The absurdity of this should show alone from the fact that these people actually need the money to cover their losses, and that it's not some profit they use to do whatever they please.

There's only so many ways to say this.

[siva_chair]

In insurance programs I can't claim money without having endured some agreed-upon circumstance. There is no profit to be sought, only those claims that I use to hedge old age, unemployment, etc.

In Ponzi schemes, I cannot claim money without having first made an initial investment into the scheme. Me getting returns also relies on the condition that the pyramid scheme doesn't get busted or collapse before I get my returns.


That is an unfortunate consequence of SS and provides compelling similarities to a Ponzi scheme (I already conceded this) but you're still missing the fundamental difference.

A Ponzi scheme is conducted in a framework where profits are unconditional, i.e. if the company made a profit I have to announce these profits to investors and pay them accordingly. If I redistribute investments in a such a way as to give the illusion of profit, I'm running a Ponzi scheme.

Yeah this is exactly how SS works. Everyone is unconditionally taxed on their labor to provide the funds of SS which are then redistributed to current retirees.

In insurance programs like SS I cannot distribute cash on a whim. Someone had to have suffered a loss. This is what makes the cash flow in insurance programs much different from those in regular companies. I do not pay more than the amount of money agreed to cover certain losses and I cannot pay this money without knowing for certain that this loss was endured. So this "profit" you keep mentioning is actually a claim used to hedge a certain loss, in the case of SS that would be old age. There is transparency and no illusion of profit, so there is no Ponzi scheme.

Umm I don't know if you realize this but those running SS are profitting. They keep the excess revenue. It isn't invested into some trust fund that pays real returns on interest earned (like private insurance typically does), it is given to congress to use.

I reject your assertion that old age is conditional for "suffering a loss." Payouts are based on who paid in first, just as in a Ponzi scheme. If we can call old age as a loss, then we can call a Ponzi scheme insurance by asserting that the returns are to hedge a certain loss, i.e. the initial money put into the scheme.

If you're prepared to call SS a Ponzi scheme then you're also prepared to declare that that money distributed to those who have suffered legitimate losses is illegal and should be confiscated. The absurdity of this should show alone from the fact that these people actually need the money to cover their losses, and that it's not some profit they use to do whatever they please.

This is a non-sequitur. SS doesn't cover a loss, it pays out to earlier contributers (based solely on the fact that they are earlier contributers) whether they need it or not.

[spitfirejunky]

Umm I don't know if you realize this but those running SS are profitting. They keep the excess revenue. It isn't invested into some trust fund that pays real returns on interest earned (like private insurance typically does), it is given to congress to use.

I reject your assertion that old age is conditional for "suffering a loss." Payouts are based on who paid in first, just as in a Ponzi scheme. If we can call old age as a loss, then we can call a Ponzi scheme insurance by asserting that the returns are to hedge a certain loss, i.e. the initial money put into the scheme.

Those in old age typically can't provide for themselves at no fault of their own, so it is a loss so to speak. Many would disagree with you.

[Already_Taken]

they should have saved up.

[spitfirejunky]

they should have saved up.

This is an excuse not to cover any catastrophic damage and defeats the purpose of insurance.

[Already_Taken]

that is an excuse not to count on bad things happening.

[spitfirejunky]

that is an excuse not to count on bad things happening.

What?

[siva_chair]

Those in old age typically can't provide for themselves at no fault of their own, so it is a loss so to speak. Many would disagree with you.

No it isn't, because there are plenty of people that provide for themselves just fine in old age, so that alone shows that it is not a "loss." Old age does not inherently equate a conditional loss of property.

[spitfirejunky]

No it isn't, because there are plenty of people that provide for themselves just fine in old age, so that alone shows that it is not a "loss." Old age does not inherently equate a conditional loss of property.

I'm not going to debate this. There are several statues worldwide that cover old age in insurance for this reason. Take it as you like.

[siva_chair]

I'm not going to debate this. There are several statues worldwide that cover old age in insurance for this reason. Take it as you like.

Yeah and private pensions function in a different manner to SS, which makes all the difference. There is a real savings investment into a trust fund that actually gains interest. A private retirement account is completely dependant on how much you invest. SS is a garaunteed minimum income, regardless of what you have put into it.

Old age isn't a loss as you are trying to paint it.

[I Am a Hat]

didnt really follow this did the news make alot of puns like '...and then bernie madoff with a lot of money'

[TheNoonwardRace]

oshi lol

[Already_Taken]

Old age isn't a loss as you are trying to paint it.

you lose your hair and your teeth and your friends and your job and eventually your life so i dont know what you are talking about.

siva would you agree the ends justifies the means?

[siva_chair]

you lose your hair and your teeth and your friends and your job and eventually your life so i dont know what you are talking about.

Except people can loose their hair or their teeth long before they reach that age, and not all old people experience those things.

siva would you agree the ends justifies the means?

No.